The Seattle-based company just missed analyst expectations with $343 million in revenue last quarter, up 22 percent year-over-year, and posted non-GAAP earnings per share of $0.18. Wall Street expected EPS of $0.17 on revenue of $344 million.

Shares were down more than 21 percent in after-hours trading, which was halted briefly because Zillow’s fourth quarter guidance was lower than what analysts expected. Zillow has already seen its stock decline about 30 percent since early August partly due to investor fears of a declining real estate market.

Zillow reported lower-than-expected revenue, $233 million, from its Premier Agent business during the third quarter due to “higher-than-expected advertiser churn” following changes to the program. It lowered its Premier Agent revenue guidance for the fourth quarter as a result.

“We believe the issues in the Premier Agent business are temporary and solvable, and in fact we have already made changes to improve advertiser retention and drive acceptance of the new model,” Zillow Group CEO Spencer Rascoff said in his letter to shareholders.

With consumers as our North Star, we want the best of both worlds for home shoppers and advertisers. We listened to our Premier Agents’ feedback and have rolled out updates that we think will improve results (ours and theirs). $Z$ZG#ZEarnings

Zillow reported $11 million in revenue from its home-buying and selling business, which launched earlier this year. It purchased 168 homes and sold 36 homes through Zillow Offers in the third quarter. The company took a $16 million loss for the Homes segment last quarter before income taxes.

Zillow and other real estate tech companies such as Redfin — whose stock fell 6 percent Tuesday — Opendoor, and OfferPad are hoping that buying and selling homes directly can open up a new revenue stream and simplify the often vexing sales process. But the move is a risky bet against the backdrop of a national housing market that is starting to shift as more houses hit the market and buyers frustrated by sky-high prices are sitting out.

Zillow expects to generate $30 to $40 million in revenue from Zillow Offers in 2018, which is down from earlier projections in May of $125 to $255 million. It expects to hold 300 to 550 homes in inventory, down from 300 to 1,000 homes.

On a call with analysts after the earnings report posted on Tuesday, Rascoff expressed optimism for the homes business, noting that people are “really responding to this method of selling their home.” He said Zillow bought 130 homes and sold 32 in October alone, and expects those numbers to grow.

Rascoff said it’s not yet clear what percentage of homes will be sold in the future with services such as Zillow Offers. But the total addressable market based on Zillow’s current purchase criteria could reach 2.75 million homes — about half the homes across the U.S. — if Zillow gets the program in the top 200 metro areas.

If more homeowners do indeed move toward this method of selling, there will be “multiple winners,” Rascoff said, adding that Zillow brings “some serious advantages” related to its brand, low seller acquisition cost, and analytics.

The CEO added that he believes Zillow Offers can still succeed in a cooling market because buyers will be more inclined to go with a convenient sale when they have fewer alternatives.

GeekWire chronicled the first house Zillow ever purchased directly over the summer, a 15-year-old, four-bedroom, two-bath ranch-style home in the Phoenix suburb of Chandler, Ariz. Zillow purchased the house in May for $410,000 and put it on the market a few weeks later for $425,000.

Zillow Offers is live in Phoenix, Las Vegas, Atlanta, and Denver. It will expand to Charlotte, Raleigh, and Houston in the coming months.

The company reported more than 186 million average monthly unique visitors for its mobile apps and websites in the third quarter, up 7 percent year over year. Traffic reached an all-time high of 195 million unique users in July. Total visits spiked 13 percent year-over-year to 1.9 billion.

In 2019, Zillow Group will be a larger business that is more integrated into the entire home life cycle. $Z$ZG#ZEarnings

Zillow also on Tuesday announced the hiring of Allen Parker as the company’s new chief financial officer. Parker previously spent more than 12 years at Amazon and was most recently vice president of finance overseeing its worldwide Amazon Devices, Appstore and Amazon Pay businesses. He replaces Kathleen Philips, who retired from the role in May. Zillow’s interim CFO Jennifer Rock is now the company’s permanent chief accounting officer.

Last month, Zillow announced that longtime leader Amy Bohutinsky, COO, plans to leave the company early next year, while former Starbucks senior vice president Aimee Johnson will join the online real estate powerhouse this month as chief marketing officer.

Zillow last week completed the acquisition of Mortgage Lenders of America, which it said will help streamline the home-buying process via Zillow Offers.

Taylor Soper is a GeekWire staff reporter who covers a wide variety of tech assignments, including emerging startups in Seattle and Portland, the sharing economy and the intersection of technology and sports. Follow him @taylor_soper and email taylor@geekwire.com.

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